Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 2, Problem 1.2CE
To determine
The effectiveness of revenue management techniques of charging differential prices based on
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Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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- You are a division manager at Honda. If your data analytics department estimates that the semiannual demand for the Pilot is Q = 350,000 −1.6P, what price should you charge in order to maximize revenues from sales of the Pilot?arrow_forwardIf your marketing department estimates that the semiannual demand for the highlander is q=150,000. - 1.5 P, what price should you charge in order to maximize revenues from the sales of highlanderarrow_forwardEveryday-low pricing is a pricing strategy that is consistent with a goal of achieving long-term profitability through volume. ( ) a) True () b) Falsearrow_forward
- How many initial subscribers would Disney+ have gotten at a price of $4.99?arrow_forwardWhy would a healthcare manager ever want to price discriminate?arrow_forwardSuppose you own a tax preparation services company, with fixed costs of $3,000/month and marginal costs of $25/appt.If the price is $60/appt, 500 appointments would be sold. If the price is $50/appt, 760appointments would be sold. a.)Use these figures to calculate the price elasticity of demand for your services. b.)Calculate the monthly profits and profit margins (profit/revenue) associated with the price of $60/appt and $50/appt. c.)Given these calculations, what price should you charge for your services, $50/apptor $60/appt? Explainarrow_forward
- You are a division manager at Toyota. If your data analytics department estimates that the semiannual demand for the Highlander is P = 150,000 – 1.5Q, what price should you charge in order to maximize revenues from sales of the Highlander?arrow_forwardThe marginal cost pricing model calculates a markup over marginal costs using estimates of the price elasticity of demand. Will any other pricing strategy result in higher profits?arrow_forwardThe price elasticity of demand for air travel differs radically from first-class (-1.3) to unrestricted coach (-1.4) to restricted discount coach (-1.8). Given these elasticities, what are the optimal prices (fares) on a cross-country trip with incremental variable costs (marginal costs) equal to $120? MR=Px(1+1/Ed) MC PED OP CLass ($) (Ed) (P*) First Class $120 -1.3 $ Unresticted coach $120 -1.4 $ Restricted Discount $120 -1.8 $arrow_forward
- Rogers purchased 60 tins of paracetamol at shs. 12,500 each from Abacus Pharma. Two months later the cost of a paracetamol tin increased by 35% and Tom Purchased 25 tins of paracetamol. a) Illustrate the above information on a graph. b) Calculate the price elasticity of demand and interpret your result c) Mention the demand and supply shifters of healthcare services other than pricearrow_forwardWhich drug type is expected to have a higher markup over cost? Brand name drugs Both have about the same markup Generic drugsarrow_forwardA physical therapy clinic faces a demand equation of Q 200-1.5P, where Q is sessions per month and P is the price per session. The clinic is currently charges $80. What is its sales volume and revenue at this price? -arrow_forward
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